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Laguna Beach

 Volume 13, Issue 83  |  October 15, 2021

City committee hears pilot idea for wildfire risk mitigation model, quantifiable data for insurance


With the recent wildfires across California, homeowners are facing non-renewals or significant increases in insurance premium rates.

With that in mind, the Emergency and Disaster Preparedness Committee heard a presentation on October 4 about wildfire structure risk mitigation from Milliman Principal Nancy Watkins, a property and casualty actuarial consultant, and CoreLogic Industry Solutions Principal Tom Larsen, a catastrophe risk model developer. 

“We all imagine a future where the summer conversations are not about wildfires,” Larsen said. “Wildfires have always been a part of the California landscape. Eliminating wildfires has never yet been achievable, but reducing the risk, what happens in a fire, is achievable.”

Watkins and Larsen shared a few case studies of using the model in other towns and presented a pilot overview for Laguna Beach.

For the Orinda case study, they believe that the data will allow them to build a model that shows how much reducing the understory vegetation will lessen the wildfire risk. They are expecting the model will show it cut the risk by about half, she added.

“I’m not talking about cutting trees down,” Watkins said. “We’re talking about cutting back vegetation and how much it will decrease the risk in our community.”

They’ve already had meetings with local officials, including Laguna Beach Fire Department Chief Mike Garcia to talk about what the city is already doing and what they need. The city will have a few more discussions with Watkins and Larsen, work up an official proposal (including cost), and then present the item to council for consideration. 

Committee members agreed on the potential benefit of the data and model, and agreed to continue moving forward with the project. Several noted that this model could help educate the public and personalize the data. 

“Obviously we are very concerned about fire risk at this point,” said EDPC Chair Matt Lawson. “And obviously we’re concerned about losing insurance, this has happened to many of our friends and neighbors here in Laguna Beach.”

City committee hears fire

Click on photo for a larger image

Courtesy of LBFD

North Emerald Bay during the 1993 Laguna Beach fire

According to a multi-agency report, Application of Wildfire Mitigation to Insured Property Exposure, included with the EDPC agenda, “catastrophe modeling allows for a probabilistic assessment of wildfire risk, examining key location and community level attributes to determine potential insured property losses. These models calculate risk by looking at a range of factors such as topography, distance to vegetation, slope, and other location-specific information including roof system covering, roof vents, suppression and accessibility conditions.” 

A straightforward benefit-cost methodology is applied to assess the economic effectiveness of the two overall mitigation strategies modeled – structural mitigation and vegetation management. 

Watkins and Larsen have been working very diligently for the past several months developing a new, granular modeling approach to try and quantify the various risk factors and how to mitigate them, as well as the degree that those mitigation methods reduce the risk related to wildfire and urban conflagration, Lawson explained. 

Watkins’ focus is climate risk and property insurance availability and affordability. She’s a homeowner in Orinda, another very high fire hazard zone in the Bay Area. 

“We have been on the chopping block for non-renewal because of the wildfire risk,” she said. “We’re living the same kind of problems that I imagine you guys are living in Laguna Beach.”

The idea is to use the best available data, science and innovative technology to try and solve these problems, Watkins said. 

Models are validated with current data to give them confidence in planning, Larsen noted.

“They give us insights that if we improve something, we can see the benefit from it,” he said. 

It’s not just about maintaining the status quo, he added; the study should also show what the financial benefits are if a specific action is taken. 

The usability of wildfire models could allow residents and communities to input property characteristics that make properties more resilient (location, construction materials, mitigation actions, etc.) and receive an output that quantifies the risk at the specific location based on the conditions present. 

Ignitions occur everywhere, but not uniformly, Larsen pointed out. A lot of time is spent discussing electrical utilities, but they are mostly caused by people and “stupid human tricks,” he said. Weather also plays a very crucial role, Larsen added.

“The worst fires happen on the worst wind days,” he said, looking back at California fires over the past several decades. 

Fuel management, terrain and suppression resources are all important to consider as well, he added. Some of these factors people can control, others they can’t. 

Take all of these pieces and they can get an understanding of the fire perimeter and intensity, Larsen explained. Adding in mitigation efforts, the model will then calculate potential damage.

“We’re really focused on mitigating or minimizing the effects of the worst fires,” Larsen said. “These aren’t regular occurrences; we’re looking at trying to protect ourselves from the impacts of a very rare event.”

Attributes of wildfire risk that affect the modeled results: Reducing wildfire fuel by utilizing regional fire breaks or cutting back on surface fuels and improving defensible space; neighborhood risk mitigation like vegetation and structural mitigation; and ignition risk reduction, which varies depending on the region. 

The benefits of specific measures vary, depending on the property, location and the fire (for example, fast moving versus slow moving).

“The models are a key to really understanding the quantitative impacts and the benefits,” Larsen said.

City committee hears green hills

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Photo by Mary Hurlbut

Green hills surround houses in Laguna Beach 

Watkins explained some possible long-term goals for the Laguna Beach model: 

–Demonstrate to the citizens how fuel reduction and home hardening actions can be effective at reducing wildfire risk using examples specific to Laguna Beach.

–Quantify what needs to be done versus what the city is currently doing to reduce the city’s wildfire risk.

–Quantify how mitigation actions by individual homeowners could influence insurers and reduce insurance premiums.

–Determine how the city should prioritize their community-level wildfire mitigation actions.

To demonstrate their ability to address these goals, Watkins and Larsen proposed starting with a pilot study modeling mitigation actions and evaluating their effects on a single neighborhood in Laguna Beach (neighborhood chosen based on wildfire risk, current rate of insurance non-renewals if data/resident input is available, and has potential for measurable and practical mitigation actions).

It would be good to focus on a specific neighborhood with those concerns, Garcia agreed. It could then guide the work the city is doing so they could be more specific in fuel modification and defensible space and justify any improvements that need to be done. 

It would be helpful to quantify the work, Garcia said, so people could see the benefit through the model and, at the same time, be able to show that to insurance companies about lessening the risk and working together from that. 

The comprehensive report would include a detailed discussion of the model, including assumptions and data limitations, interpretation of model results for chosen pilot area, discussion of how mitigation could impact insurance availability and premiums and discussion of suggested next steps for expanding to other areas of the city.

Watkins emphasized that this was a starting point and can be modified with feedback from the committee and officials.

Doing this type of model will help people deal with the insurance carriers they have in Laguna Beach, Lawson pointed out.

The greatest benefit will be that the city can show the steps taken by the community and, through the cutting-edge model, show how much they’ve been able to substantially reduce the risk, Lawson said. 

It will also provide a common basis for understanding what the fire safety benefits of various actions might be on a fairly granular level, he added. 

“And, if nothing else, at least give us a fighting chance to improve insurance availability,” he said. 

City committee hears houses

Click on photo for a larger image

Photo by Mary Hurlbut

The proposed risk mitigation model will be specific to Laguna Beach 

EDPC Member Thomas Gibbs commented that there are two main aspects to focus on: Reducing risk and educating the underwriters. Property/casualty coverage policies are being withdrawn, he said. 

“It’s happening in this town and it is not good,” Gibbs said. “Coming up with a strategy to deal with it is really important.”

The sustainability of the community is becoming a concern of not only the insurance carriers, but potentially also the mortgage lenders and institutional investors, Lawson added. 

That seems to be the direction it’s headed, Watkins agreed. 

“California has got to get our risk down,” while some reinsurers have stayed, others are avoiding the state now, Watkins said. “These past couple of years, well, they have been brutal. And things don’t seem to be getting better. So, I think we can expect the future to continue to be brutal and maybe even worse if we don’t get a handle on how the best risk reduction is going to help us.”

While some organizations, reports and community programs provide guidance on how to create more wildfire-resilient communities, it is relatively unknown whether these risk reduction actions are economically worth the effort and cost, or which features are the most important.

There aren’t any very thorough and accurate mitigation credit tables for wildfires, Watkins noted, and it’s harder to model wildfire risk reduction when there are so many variables to consider with nearby houses and out in the community. 

Watkins, explaining how wildfires are different from other natural catastrophes, noted that a neighboring house blowing down the street during a hurricane doesn’t make the storm worse, but a neighboring house burning up in a wildfire adds fuel to the flames. 

Mitigation is also very local for wildfires and really granular data is required for modeling, she added, and that’s not currently available. Insurance companies don’t know how to properly offer mitigation discounts, she said. 

There’s nothing out there quite like what they’re working on, she said. It will be peer-reviewed by professionals in the industry, she added.

“We are going to try to create the first really sophisticated mitigation credit table to show how it’s done properly,” Watkins said. “I think it’s going to be very, very impactful. It’s going to show people how to do it, tell them what not to do to mess up the market…and then give an illustration that it can actually be done and that the impacts can be significant enough that it’s worth it.”

Ideally, an entity like Cal Fire or FEMA could fund education and make this much more available to local communities, Watkins said. 

“I want this to start scaling so that everybody starts thinking about how to reduce their risk and it’s not reinventing the wheel every single time,” Watkins said. 

The state would likely be interested in the data, some committee members pointed out.

Although, EDPC Vice Chair Bob Elster reminded the group that the focus is on Laguna Beach right now.

“They want to drag on our coattails afterwards; I’m very happy to have them do that,” Elster said. “Let’s worry about our community first and get the damn thing done here.”


Lana Johnson, Editor -

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In Memoriam - Stu Saffer and Barbara Diamond.

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